England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PLYMOUTH COUNTY COURT
(HIS HONOUR JUDGE NELIGAN)

		Royal Courts of Justice Strand, London, WC2A 2LL
		23rd May 2008

Lord Justice Richards:

1. This is an appeal against a decision of HHJ Neligan in the Plymouth County Court, dismissing an appeal against the refusal by District Judge Griggs to set aside a judgment entered against the defendant, Miss Sinclair, in her absence. The case has a lengthy history to which I must refer in order to explain the issues that arise on the appeal.
2. In June 2005 the claimant, Mr Johnson, brought a claim against the defendant in the Bodmin County Court to recover monies allegedly loaned to her to assist her in renovations and refurbishments to her property, called Red Tye Farm, and in setting up her new business. He also claimed sums in respect of work allegedly done by him in respect of the new business. The total claimed was in excess of £24,000 plus interest.
3. In July 2005, on the claimant's application for a judgment in default of defence, District Judge Griggs entered interim judgment for the claimant for an amount to be decided and costs. On 8 September 2005 there was a directions hearing at which District Judge Griggs allocated the claim to the fast track, directed that the trial take place during a window from 27 February to 17 March 2006 and gave directions for the filing of a defence, disclosure and witness statements.
4. On 20 September 2005 the defendant filed a manuscript of defence, admitting liability for some of the monies claimed -- said to be around £10,000, possibly £12,000 out of the total claimed -- but denying liability for the rest, and stating that the signature on one of the loan agreements was not hers. At the same time, she applied to set aside the default judgment on the ground that the relevant documents had been sent to Red Tye Farm, which was in Cornwall, whereas she actually lived at a different address, near Plymouth. She also said that she had a doctor's letter regarding her mental health. On 26 September District Judge Thomas ordered the application to set aside the default judgment to be dealt with by written representations, to be filed and served by 17 October. Written representations were filed on behalf of the claimant on 7 October. They said, amongst other things, that because the defendant admitted that an amount was owed, it was not appropriate for the judgment to be set aside.
5. On 15 October the defendant wrote to the court asking for an adjournment, which led District Judge Griggs to direct on 19 October that she file a sick note or a doctor's letter. She did not respond until 7 December, when she sent a letter to the court together with a medical certificate. District Judge Griggs considered that material, but ordered on 15 December that the case should remain in the existing trial window.
6. On 18 January 2006 the court notified the parties that the trial had now been fixed for 3 March at Truro County Court. On 18 February the defendant applied to the court "to suspend the hearing" because of her health, saying that she had sick notes and doctors' letters and was awaiting an operation. It appears that at that stage the supporting material was not sent. However, on 1 March, by which time she had solicitors acting for her, those solicitors applied on her behalf to the court at Truro for the hearing on 3 March to be adjourned because she was unable to attend on grounds of ill-health. The solicitors attached a medical note from her doctor, which confirmed that she had been suffering from chronic pelvic inflammatory disease for about eighteen months, involving numerous hospital admissions in the preceding eight weeks, and had also been seen for depression and emotional difficulties. As a result, the doctor believed that she was at that time unfit to attend court, primarily, he said, because of her abdominal pain. In their letter the solicitors also told the court that they had been informed that the defendant was awaiting major surgery, which was due to take place on 1 May and would mean a six-week recovery period, though at that time they had no written confirmation of the operation date. District Judge Mitchell, on reading the application by the solicitors and the supporting material, adjourned the trial until 28 April 2006; then on 25 April he ordered a further adjournment to 29 June.
7. By an application dated 8 June, but date stamped as received by the court on 16 June, the defendant applied to have the claim struck out and the trial adjourned owing to her operation date. At that time an operation was planned for 19 June, but in the event it was postponed because of a shortage of hospital staff. I will come back in a moment to that application for an adjournment dated 8 June. Also on 8 June she filed an amended defence, in which she alleged for the first time that, as the claimant was well aware, the business referred to in the claim form was that of prostitution and the property referred to was to be used for the purposes of prostitution -- that is to say, as a brothel; and it was said, in effect, that any loan agreement or agreement for the claimant to do work in connection with the business was illegal and unenforceable. There was also a denial that the defendant signed certain of the documents relied on by the claimant. She denied the claim and submitted that it should be struck out as an abuse of process.
8. On 29 June the matter came before District Judge Mitchell for the trial previously fixed, but the defendant did not attend court on that date. At the time of the hearing, apparently because of an administrative error within the court system, the District Judge had not seen the defendant's application of 8 June or her amended defence. Those acting for the claimant referred the court to a letter received by them on 5 May, stating that the defendant would be in hospital the week before the hearing and would have a six-week recovery period thereafter. That was a reference to the operation planned for 19 June but which, as I have said, did not go ahead on that date. The District Judge himself referred at the hearing to a letter apparently sent by the court to the defendant on 26 June, stating that the court had received an application to adjourn but that it was unsigned, with the incorrect fee and without supporting medical evidence, and that those defects would have to be remedied, otherwise the trial would proceed on 29 June. The defendant has told us that she did receive such a letter from the court and that she returned the application for an adjournment in the correct form. We do not have a copy of the documents returned by her, but if the dates are as they appear then it would seem that the application must have been returned by her very soon before the hearing fixed for 29 June and at a time when the operation previously planned for 19 June had already been postponed.
9. However, on the basis of the material then known to him, the District Judge had to make a decision whether to proceed, and he decided that he should proceed with the hearing. He noted that the judgment on liability -- that is to say, the default judgment entered in July 2005 -- was still in place. So far as he was aware, the only defence received by the court had been the manuscript defence of 20 September 2005, which of course made no mention of a defence of illegality, and the District Judge noted that the defendant was not at court to put forward a positive case. The question was therefore, simply: how much was owed to the claimant? On that question the district judge heard evidence from the claimant himself and submissions from the claimant's solicitor; he gave judgment for the claimant in a sum which, with interest, amounted to £30,679.25. He also ordered the defendant to pay the claimant's costs to be the subject of detailed assessment, if not agreed.
10. On the same day, but after giving judgment, it seems that the district judge had sight for the first time of the defendant's application of 8 June and the amended defence. That created a problem which he dealt with on a very sensible basis. He ordered that, in the circumstances, the application for an adjournment was to be treated as an application to set aside the judgment he had just entered and, if that application was granted, the filing of an amended defence was to be treated as an application to amend the defence. He also ordered that the matter be dealt with by way of written representations and that the defendant should file and serve written representations by 29 July.
11. On 25 July, in accordance with that order, the claimant's solicitors filed written representations asking for the defendant's application to be dismissed. On 1 August a notice was sent by the court to the parties to the effect that the hearing of the application -- the deemed application to set the judgment aside -- would take place on 25 August at Plymouth County Court. The hearing duly took place on the date stated in the notice, 25 August. Furthermore, the defendant did attend court on that day, but she attended only late in the afternoon, by which time the hearing had finished and an order had been made. At the hearing that had taken place earlier that day and on the basis of the defendant's non-attendance, District Judge Tromans struck out the deemed application to set aside the judgment of 29 June and ordered the defendant to pay the claimant's costs. He also ordered that there be no further applications by the defendant without leave of the court.
12. The next event in the chronology was on 6 October when the claimant obtained a charging order over Red Tye Farm. Two to three weeks after that, on 25 October, the defendant lodged a further application to set aside the judgment of 29 June. On 8 November District Judge Griggs ordered the matter to be dealt with by written representations and directed the claimant to file and serve representations by 22 November. In accordance with that order a letter from the claimant's solicitors, setting out the history of the matter, was sent to the court on 16 November.
13. There followed a hearing on 28 November when District Judge Griggs heard the defendant's application dated 25 October to set aside the judgment of 29 June. The District Judge dismissed the application, saying that it was a repeat of the application heard on 25 August -- the application that had been struck out for non-attendance on that date. He said that the defendant had not shown a good reason for her failure to attend the hearing on 29 June; he was not satisfied that she had made the application to set aside the judgment promptly, or that she had a reasonable prospect of success in defending the claim.
14. Permission to appeal against that decision was subsequently granted by HHJ Vincent, and the substantive appeal was heard by HHJ Neligan on 24 August 2007. At that hearing, the defendant was represented by counsel under the free representation scheme. The judge gave a reasoned judgment dismissing the appeal, a transcript of which we have. From that transcript it is apparent that, despite some initial confusion, the judge's ultimate focus was on whether the exercise of discretion by District Judge Griggs on 28 November, in dismissing the further application to set aside the judgment of 29 June, had been plainly wrong. The judge directed himself by reference to rule 39.3(5) of the Civil Procedure Rules, and held that District Judge Griggs had been entitled to conclude that the application was not made promptly. The defendant had failed to establish that there was a good reason for not attending the trial, and the defence disclosed in the draft amended defence, according to the judge, "had not the slightest prospect of succeeding".
15. That is the decision now under appeal to this court, permission to appeal having been granted by Waller LJ. At the hearing of the appeal before us, the defendant, Miss Sinclair, has appeared in person assisted by her friend, Miss Ashdown. Between them they have explained the defendant's case very clearly and have been very helpful in responding to the various questions that the court have had.
16. The detail of the case for the defendant is set out in written grounds of appeal and a written skeleton argument, which are very full. It seems to me that the main issues raised in those documents and in what has been said orally today are fairly identified in the written skeleton argument that has been provided by Mr Huggins, counsel for the claimant, and the issues can be considered properly within that framework. They are centred on CPR 39.3(5), which concerns failure to attend the trial. Paragraph (1) of Rule 39.3 provides: "the court may proceed with the trial in the absence of a party". By paragraph (3), where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside. Paragraph (5) reads:

"Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant --

(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;

(b) had a good reason for not attending the trial; and

(c) has a reasonable prospect of success at the trial."

17. It is to be noted that sub paragraphs (a), (b), and (c) are cumulative requirements and are conditions precedent -- that is to say, necessary requirements -- for the exercise of the court's power to grant an application to set aside (on that point see Regency Rolls Ltd v Carnall [2000] EWCA Civ 379, a judgment of the Court of Appeal dated 16 October, paragraph 44, where Simon Brown LJ set out, with evident approval, a note on this point in the then edition of the White Book).
18. The first issue is whether the hearing on 29 June was a trial within the meaning of Rule 39.3, so that the rule does actually apply to the situation before us. To my mind, it plainly was. It proceeded correctly on the basis that there was an interim judgment as to liability, namely the judgment of July 2005 which remained in place, but that the amount due fell to be assessed, and for that purpose the court heard evidence and reached a considered judgment on the outstanding issue. The language of CPR 39.3 is amply wide enough to cover a trial of quantum as much as a trial of liability, and there is no reason of policy why its scope should be cut down. Accordingly, the judge was, in my view, right to proceed by reference to Rule 39.3.
19. The next issue is whether it was wrong to hold that the defendant failed to act promptly when she found out that the court had entered judgment against her. In the Regency Rolls case, at paragraph 45, Simon Brown LJ considered that "promptly" should not be construed too strictly as requiring that there had been no needless delay on the part of the applicant, but as requiring that the applicant had acted with all reasonable speed in the circumstances. I shall follow that approach.
20. In assessing the relevant question, it is, in my view, right to bear in mind that the defendant was a litigant in person, even though it appears that HHJ Neligan did not consider that point to be relevant, and also that her health was poor. I have referred already to various points about her ill-health. What she says is that she had chronic physical illness resulting in major surgery, preceded by frequent emergency admissions and treatment over an extended period, together with mental illness requiring hospital admission and medical intervention. She has provided this court with a detailed chronology, interspersing details of the various medical incidents and treatment, and has provided the available documentary support. The question of the strict admissibility of such material is something I put to one side. It is material that I think it right to bear in mind in considering the appeal, in any event.
21. Those are the background circumstances in the light of which the issue of promptness has to be assessed. Plainly, nobody could complain about lack of promptness in relation to the application dismissed by District Judge Tromans on 25 August. That application for the claim to be struck out had been lodged before the trial on 29 June and was treated as an application to set aside the judgment when it was discovered immediately after the hearing on 29 June. The defendant's principal difficulty on this issue, however, is that, having turned up at court on 25 August -- the date fixed for the hearing of the deemed set aside application, albeit she turned up too late for that hearing -- she then waited almost two months, until 25 October, before lodging another application to set aside - the application which is the subject of the present appeal. She says, and it is said on her behalf, that she was not acting rationally at the time, and reference is made to her mental as well as physical illness. The fact is, however, that District Judge Griggs had to make a decision on the actual evidence before him. He found on that evidence that there had been a failure to act promptly, and in my view, agreeing with HHJ Neligan, the district judge cannot be said to have been plainly wrong so to find. There is nothing in the detailed medical history now provided and the accompanying chronology which causes me to doubt that conclusion.
22. The next issue is whether the defendant had a good reason for non-attendance at the trial on 29 June. The approach to be adopted to an issue of that kind is set out in paragraph 12 of the judgment of my Lord, Mummery LJ, in the case  of Brazil v Brazil [2002] EWCA Civil 1875, which has been shown to  us  in  the form in which it was cited at paragraph 20 of Estate Acquisition and Development Ltd v Wiltshire [2006] EWCA Civ 533:

"The court has to examine all the evidence relevant to the defendant's non-attendance; ascertain from the evidence what, is a matter of fact, was the true 'reason' for non-attendance; and, looking at the matter in the round, ask whether that reason is sufficient to entitle the applicant to invoke the discretion of the court to set aside the order. An over-analytical approach to the issue is not appropriate, bearing in mind the duty of the court, when interpreting the rules and exercising any power given to it by the rules, to give effect to the overriding objective of enabling it to deal with cases justly. The perfectly ordinary English phrase 'good reason' as used in CPR 39.3(5) is a sufficiently clear expression of the standard of acceptability to be applied to enable a court to determine whether or not there is a good reason for non-attendance."

23. The position here is that the defendant had been aware for some time of the trial date fixed for 29 June; indeed, she had applied for it to be adjourned and had heard nothing to indicate that the application had been successful or that the trial had been adjourned. The reason given by her for not attending court on 29 June was, as stated in the application, that she was due to have an operation on 19 June; but as I have already said, that operation was in fact postponed. It was re-fixed for 24 July, but was then further postponed by the defendant herself and did not take place until January 2007. The defendant tells us that she was too ill to attend, and again it is said she was not acting rationally at the time. Her problem with regard to that is that she did not provide any medical evidence to show that she was unfit to attend court on 29 June. That point is reinforced by the fact that the court's letter of 26 June to which I have already made reference -- the letter explaining to her that her application was not signed and asking for it to be resubmitted with medical evidence -- had drawn specific attention to the need for medical evidence. Even bearing in mind the wider picture concerning the defendant's prolonged ill health and what she says about having been too ill at the relevant time to give thought to the implications of the postponement of her operation, I do not think that District Judge Griggs can be said to have been wrong in reaching the conclusion he did, that she had failed to show a good reason for her non-attendance at the trial.
24. The final issue is whether the defendant has a reasonable prospect of success at the trial. Of course, if I am right in relation to the previous issues, nothing actually turns on this, since, as I have said, the requirements in Rule 39.3(5) are cumulative and the defendant must satisfy them all if she is to have the judgment set aside. But I will deal with the question of reasonable prospect of success because it is what caused Waller LJ to grant permission to appeal. He considered that, if the defendant's amended defence were established on the facts, there was, at least arguably, a good prospect of defeating the claim or substantial parts of it, and that where the prospects of the defence succeeding were good, it would arguably be wrong to hold that she did not act promptly or that her excuse for not attending the trial was so weak that she should not have the opportunity of a trial.
25. The focus must be on the amended defence, lodged before the hearing of 29 June and which came to the district judge's attention immediately after that hearing. It is rightly conceded by Mr Huggins in his skeleton argument that the amended defence may disclose an arguable defence in law. But he submits that HHJ Neligan was entitled to form a negative view of the likely substance of the factual assertions made in the amended defence and to conclude that the defence did not have a real prospect of succeeding. He says that the judge can be seen to have been concentrating on the tardiness of the amended defence; that is to say that it was put in so long after the date of the original defence making no reference to illegality, and to the way in which it had been advanced, and the discrepancy between it and the previous admission of liability for a substantial part of the monies claimed. The judge himself said at paragraph 25 of his judgment that the illegality argument was not even hinted at in the original defence, and he referred to the amended defence as being "vague and generalised". It is therefore said that the judge was entitled to form a negative view of the substance of the defence.
26. It is necessary to take account of what has been said about the illegality defence in the submissions before us this morning. What is said is that the defendant did not appreciate the possibility of such a defence at the time when she put in her original manuscript defence. It came to her attention only because it was used successfully against her in a claim that she had brought against another party, and that is the explanation given for why it was raised for the first time at so much later a date than the original defence. It may be too that the matter had been drawn to her attention by the solicitors who acted for her at the beginning of March 2006, but who ceased to act for her some time thereafter.
27. I have those matters very firmly in mind, though there is nothing to show that there was evidence to support those points before the district judge or HHJ Neligan. It seems to me that, in all the circumstances, the judges below were entitled to conclude on the material before them that there was no reasonable prospect of the defence succeeding. They were plainly entitled to look at the substance of the matter and were not required to confine themselves to the bare form of the pleaded defence
28. For all those reasons I am satisfied that District Judge Griggs approached the matter in the correct way in his decision dismissing the application to set aside the judgment of 29 June, and that his reasons for reaching the decision he did were sustainable reasons. HHJ Neligan was right so to hold when he dismissed the appeal against that decision. I would add that what happened did not in any way infringe the defendant's rights under Article 6 of the European Convention on Human Rights, to which there is also made some reference in her grounds of appeal. On that point I need not say anything beyond the reasons I have already given. For those reasons I would dismiss the appeal to this court.

Lord Justice Mummery:

29. I agree

Sir Paul Kennedy:

30. I agree.

Order: Appeal dismissed